Theft or Fraudulent Distribution of Payroll Checks Is a Potential

question 89

Multiple Choice

Theft or fraudulent distribution of payroll checks is a potential threat to the payroll processing activity.What is one control that can be implemented to help prevent paychecks being issued to a "phantom" or "ghost" employee?

• A)the cashier should sign all payroll checks
• B)prenumber all payroll checks
• C)use an imprest account to clear payroll checks
• D)paychecks should be physically distributed by someone who does not authorize or record payroll

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Definitions:

Adjusting Entry

A journal entry made in accounting records at the end of an accounting period to allocate income and expenditure to the appropriate years.

Telephone Bill

A periodic charge for the use of telephone services, often including the cost of calls, subscription fees, and taxes.

Accounts Payable

Money owed by a company to its creditors or suppliers for goods and services received but not yet paid for.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against an asset over its life up to a specific date.